New Rules by Water District May Threaten Development : Resources: Pico officials say requiring purchase of water rights is necessary to ensure future supplies. But the cost may make developers think twice before going ahead with projects.

Tight water supplies are threatening to drive up the price of progress in parts of Pico Rivera, and city officials are concerned.

A water district serving part of the city has decided to force developers to buy water rights for their projects before the district will hook up their water supplies.

“There’s only so much water that we have,” said Harold W. Maupin, general manager of the Pico Water District. “We just don’t have it.”

The new rule has created a stir at City Hall. Pico Rivera officials fear the potentially costly requirement could hamper development in some parts of the city. The Pico Water District is apparently the first water agency in the Southeast/Long Beach area to impose such a strict regulation.

“It could have a significant impact on future development in the (water) district’s boundaries,” said David A. Caretto, assistant city manager. “It very well could kill a project.”

The Pico Water District Board of Directors approved the new regulation earlier this month after considering the increased water demands of a proposed $50-million development. The Braemar-Pico Rivera Partnership, a development group, wants to build 484 condominiums and senior citizens apartments and a 38,000-square-foot shopping center within the water district’s boundaries.

Water officials estimated that the development would require an additional 150 acre-feet of water each year--excluding water needed for landscaping--which would exceed the district’s current supplies. An acre-foot of water supplies two average families for one year.

Area water rights can be purchased for about $3,000 an acre foot, said Chris Nagler, a deputy water master with the California Department of Water Resources. At that price, Braemar would have to come up with about $450,000 to buy water rights for its project, which would cover 13 acres on the southeast corner of Washington and Rosemead boulevards.

In addition, there is no guarantee that Braemar will be able to obtain enough water rights, Nagler said. The availability of water rights varies.

A court agreement reached in the 1960s parcels out pumping rights in the Southeast/Long Beach area as if they were pieces of land. Nagler’s agency oversees compliance with that agreement and keep tabs of some of the water rights that are for sale.

Braemar Vice President Robert Kleiman said he did not know if the requirement threatens the project. “We’re still exploring it,” he said. “This is an issue that’s so new that there isn’t a great deal I have to comment on.”

Since the Braemar project is in a city redevelopment zone, the city could decide to use redevelopment tax revenue to pay for the water rights to keep the project on track, Caretto, the assistant city manager, said.

“(The rule) causes a significant increased cost in the project that was not anticipated,” Caretto said. “We have not discussed with Braemar who is going to absorb that cost.”

Caretto said it is difficult to tell how many more projects would be affected in the future. Most new development taking place in Pico Rivera is in a 670-acre redevelopment area. About one-third of the redevelopment zone falls within the Pico Water District, Caretto said.

The Redevelopment Agency is negotiating with a developer to build about 40 houses within the water district’s boundary, Caretto said. And more projects are likely.

The Pico Water District was established in 1926 and serves about 25,000 people and nearly 400 businesses, about a third of the city, Maupin said. The district relies entirely on ground water pumped from wells to supply its customers.

The municipal water department, which serves the rest of the city and also relies entirely on ground water, leases more water rights when necessary and is not considering changing its policy, Caretto said.

The Pico Water District has rights to pump 3,624 acre feet of ground water a year. The district’s customers usually use about about 3,600 acre feet annually, which doesn’t provide much leeway for growth, Maupin said.

In the past, the district has leased water rights for short periods to make up for shortfalls and then passed the cost on to its customers. But Maupin said the district now wants developers to secure permanent pumping rights, then deed them to the water district before receiving water service.

“Why should the other customers have to subsidize something of this nature?” Maupin said. “(The developer) is a profit-making organization. They should be responsible for their actions.”

Among other Southeast cities, Cerritos has a regulation that is similar to that of the Pico Water District. But Cerritos gives developers more options.

Developers who have water rights may deed them to the Cerritos Water Department, which would supply the development, said Water Supt. Ron Babel. But developers who do not have water rights simply pay Cerritos a development fee--$600 per acre of land for the project. Cerritos uses that money to buy additional water rights.

But Cerritos is able to buy imported water from the Metropolitan Water District to supplement its supplies if necessary. The Pico Water District does not have an MWD connection.

“We just don’t have the water rights,” Maupin said. “They’re (the city Redevelopment Agency and developers) creating a problem, and they need to solve it.”